Employee happiness is serious business
Created in partnership with The London School of Economics, this research reveals how employee happiness drives measurable productivity, retention and business performance.Explore:
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What employee happiness really means in practice
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How to measure happiness in a way that stands up in the boardroom
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The drivers of happiness that influence performance
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How happiness connects to measurable ROI
Happiness isn't soft. The results aren't either.
Data from The London School of Economics shows how employee happiness influences performance, retention and business value.
Significant perception gaps
This year’s report brings to light a persistent gap between how leaders perceive their workforce and the everyday experiences of their employees. While decision makers generally remain optimistic about the productivity, support, and engagement of their teams, our findings reveal that employee sentiment often lags behind these perceptions.
Recognition and rewards is business critical
Recognition and rewards remains fundamental to a high-performance culture, ranking as the number one driver of productivity for a second consecutive year. Our findings also highlight some interesting gaps between Australian and New Zealand employees that HR leaders need to be aware of.
The power of joy at work
One of the biggest trends coming out of this year's research is the impact of feeling joy at work. This underrated performance lever can dramatically improve employee engagement, productivity, retention, connection, and support. Our research cements that joy is not a soft cultural concept, but a measurable economic force.
Pressure is easing, but it hasn’t disappeared
Productivity is rising, with nearly two-thirds of employees reporting they frequently feel productive. Performance doesn’t improve in isolation; employees’ energy, focus, and resilience directly determine how effectively they work. That’s why stress and burnout are critical warning signs, and why the downward trends we observed in both are encouraging.
What our research reveals...
A snapshot of our latest findings, showcasing the state of engagement, productivity, and retention in 2026 across Australia and New Zealand.
What our research reveals...
A snapshot of our latest findings, showcasing the state of engagement, productivity, and retention in 2026 across Australia and New Zealand.
1 in 4
A quarter of employees feel less engaged at work
46%
But almost half of business and HR decision makers believe engagement has increased
More than half of surveyed employees say they have considered leaving their job in the last six months
Almost two thirds of employees frequently feel productive, up from 47% in 2025
10%-12%
Happier employees are 10%-12% more productive.
21%
Higher employee satisfaction is associated with 21% higher profitability.
30%
Only 30% of HR teams measure employee happiness directly.
Download The Happiness Dividend Report
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